Holcim Group’s media release on its annual results 2010

In a challenging environment, Holcim sold more cement, aggregates and ready-mix concrete. Selective capacity expansion improves environmental and cost efficiencies.

Annual results 2010

• Rising sales volumes in cement, aggregates and ready-mix concrete
• Consolidated net sales increase by 2.5 % to CHF22 billion
•  Effective cost management reduces fixed costs by a further CHF312 million
• Operating EBITDA decreases by 2.5 % to CHF4.5 billion
• Reduction in net income by 17.2 % to CHF1.6 billion
• Cash flow from operating activities stabilized at a high level at CHF3.7 billion
• Net financial debt reduced by CHF2.5 billion, strong liquidity and solid balance sheet
• Proposal for a payout from capital contribution reserves corresponding to last year’s amount of CHF1.50 per registered share

Outlook

• Europe: better demand trend
• North America: slightly increased sales volumes
• Latin America: growing demand for building materials
• Africa, Middle East: rather subdued market situation
• Asia Pacific: continuing growth – additional construction activity in Oceania in the second half

Holcim is confident that the Group will be successful in securing its share of future growth in the emerging markets and that its lean cost structures will enable it to benefit above average from a continuing economic recovery in Europe and North America.

In Europe and North America, the improving economic condition has yet to have much impact on the construction sector. The stimulus programs were not implemented consistently in all regions. In addition, periods of cold weather and heavy rains hampered construction activity in many countries.

The emerging markets largely remained on a growth track – also strengthened by solid construction activity. In a number of markets, the monsoon and tropical storms temporarily impacted business conditions.

Rising sales volumes

Despite the challenging environment in many markets, Holcim increased its sales volumes. This volume growth is broad-based, with Group companies in all five Group regions contributing to the success. The percentage increase was more pronounced for aggregates and ready-mix concrete than for cement.

Effective cost management

In light of the uncertain economic outlook, Holcim continued to adhere to its tight cost management in 2010 with the aim of safeguarding the substantial reductions in fixed costs achieved the previous year despite the commissioning of new production capacity. The Group companies indeed succeeded to reduce their fixed costs by a further CHF312 million.

 Higher turnover and only slightly lower operating results

Consolidated net sales increased by 2.5 % to CHF21.7 billion, while operating EBITDA declined by 2.5 % to CHF4.5 billion. The decisive factors were amongst others the less favorable results of Holcim Apasco in Mexico and ACC in India. Holcim Apasco was hit by weak domestic demand while in the case of ACC, the delayed commissioning of additional cement capacity led to higher production and distribution costs. In the aggregates segment, however, the Group's operating EBITDA margin increased.

 Holcim suffered the sharpest decline in its operating result in Europe. In the two Group regions North America and Africa Middle East, operating EBITDA margin could be increased. The operating result was up compared to the previous year in Group region Asia Pacific, where it benefited from the full consolidations in Australia and the positive business development in Indonesia. The operating EBITDA margin declined in this Group region; reflecting among other things the change in the product mix due to the full consolidation of Holcim Australia, as well as the temporary price pressure in India during the monsoon season. In Latin America, Holcim Brazil in particular improved substantially.

Net income decreased by 17.2 % to CHF1.6 billion, and the share of net income attributable to shareholders of Holcim Ltd declined by 19.6 % to CHF1.2 billion.

Solid financing

Once more, Holcim ended 2010 with a solid balance sheet and liquidity. The

Group's net debt was further reduced despite the commissioning of new plants and additional capacity. Cash flow from operating activities stabilized at a high level at CHF3.7 billion.

Capacity expansion for lower costs, higher revenues and improved environmental balance sheet

As in previous years, Holcim invested in specific capacity expansion in all segments. The main focus was on the cement segment expansion program initiated in 2007. Expenditures already peaked in 2009, but 2010 still saw CHF1.2 billion invested in expansion projects in new and existing markets. Other investment activity was once again kept on a low level.

In 2010, the Group commissioned new cement capacity to the amount of 6.8 million t. As part of the expansion program, Holcim Apasco commissioned a new cement plant in Hermosillo, Northwestern Mexico, shortly before the end of the year. With an annual cement capacity of 1.6 million t, the new plant will make it possible to serve the regional construction industry more efficiently and to cut logistics costs. The Nobsa plant in Colombia also expanded its grinding capacity in 2010. In India, Ambuja Cements and ACC commissioned several cement and grinding plants, which operate as a network. This means that the two Group companies are well equipped to capture their share of the steady growth in cement consumption. The expansion program also included the Wadi plant, where ACC commissioned an expanded kiln line. With a daily capacity of 12 500 t, it is currently regarded as one of the largest production units worldwide.

Further capacity expansion is underway in Russia, Azerbaijan, Ecuador,

India and Indonesia. In Australia, there are also plans for a large quarry, which will allow for an optimal supply of aggregates to the Sydney urban area.

Alexander Gut, Managing Partner of Gut Corporate Finance AG, proposed to the Annual General Meeting for election as member of the Board of Directors of Holcim Ltd

The Board of Directors proposes to the Annual General Meeting of May 5, 2011 that Alexander Gut, Managing Partner of Gut Corporate Finance AG, Zurich, Switzerland, be elected to the Board.

Alexander Gut, 47, Swiss and British national, holds a degree as Dr from the University of Zurich (Business Administration) and is a Swiss Certified Accountant. From 1991 to 2001 he was a Senior Manager of KPMG in Zurich and London, from 2001 to 2003 a Partner of Ernst & Young in Zurich and from 2003 to 2007 a Partner of KPMG in Zurich. Since 2010 he is member of the Board of Directors of Adecco Group, Switzerland.

Proposal for a payout corresponding to last year’s amount

The Board of Directors will be proposing to the Annual General Meeting on

May 5, 2011 a payout from capital contribution reserves corresponding to last year’s amount of CHF1.50 per registered share. This means that the payout ratio is above the target ratio of one third of Group net income and reflects the confidence of the Board of Directors and the Executive Committee in the future development of business.

Outlook for 2011

The development of the business cycle still remains uncertain in some areas of the world economy. From a global perspective, it can be expected that the construction sector in the mature markets will recover and that the growth in the emerging markets will continue. Holcim therefore anticipates an increase in sales across all segments. The Group will do its utmost to counter the rise in production and distribution costs by vigorously pursuing price increases.

In Asia, growth can be expected to continue with additional construction activity in Oceania in the second half. Volumes are expected to increase slightly in Europe and North America, and Latin America should also see growth in demand for building materials. The development will be more subdued in Group region Africa Middle East.

The Board of Directors and the Executive Committee are confident that the

Group will be successful in securing its share of future growth in the emerging markets and that its lean cost structures will enable it to benefit above average from a continuing economic recovery in Europe and North America.

The media release in its entirety can be found at http://www.holcim.com/uploads/CORP/20110302_Mediarelease_E.pdf

Read the article online at: https://www.worldcement.com/europe-cis/02032011/holcim_group%E2%80%99s_media_release_on_its_annual_results_2010/